On April 7, 2025, the China National Textile and Apparel Council (CNTAC) issued a public statement firmly opposing the US government's imposition of additional tariffs on Chinese textile and apparel products under the pretext of 'reciprocal tariffs.' This statement comes amid renewed tensions in US-China economic relations, directly impacting China's textile and apparel industry, which exports over $300 billion annually. The CNTAC explicitly stated that the US move seriously violates WTO rules and destabilizes the global textile supply chain.
Background
This tariff escalation is not an isolated incident. Since the onset of the US-China trade war in 2018, the US has imposed multiple rounds of tariffs on Chinese goods, with textile and apparel products frequently targeted. In early 2025, the US introduced a new tariff package citing 'trade deficits' and 'market distortions,' focusing on Chinese textile finished products and fabrics with competitive advantages. According to data from the General Administration of Customs of China, China's textile and apparel exports to the US in 2024 were approximately $45 billion, accounting for about 15% of the industry's total exports. If the new tariffs are implemented, rates for some categories could climb above 25%, directly impacting corporate profit margins and order stability.
It is noteworthy that the CNTAC is not a government agency but a voluntary industry organization composed of textile enterprises and institutions nationwide. Its statement represents the collective stance of the industry. The strong wording of 'firm opposition' reflects widespread concern across the supply chain about the rise of trade protectionism. From Keqiao to Shengze and Nantong, major industrial clusters have begun assessing inventory and order risks.
Industry Impact
The direct consequence of US tariff increases is cost pass-through and market share loss. For Chinese exporters, higher tariffs will compress already thin profit margins. Industry public data shows that the average net profit margin for Chinese textile companies is only 3%-5%. For example, a shirt with an export price of $20, if the tariff rises from 12% to 25%, would incur an additional cost of about $2.6, nearly wiping out the entire profit. Some companies may be forced to raise prices, but US buyers could shift to alternative suppliers in Vietnam or Bangladesh, leading to reduced orders for China.
A deeper impact lies in the reshaping of global supply chains. The US aims to promote 'friend-shoring' and 'near-shoring,' accelerating the transfer of textile capacity from China to Southeast Asia and Mexico. CNTAC data shows that while China's total textile and apparel exports grew 5% year-on-year in 2024, exports to the US slowed to just 2%, far below the growth rates for emerging markets such as ASEAN and Africa. This indicates diminishing reliance on a single market, but short-term substitution effects remain significant.
In response to external pressures, China's textile industry is focusing on two strategies. First, technological upgrading: smart factories in Jiangsu and Zhejiang provinces have achieved full automation from spinning to garment production, reducing unit labor costs and increasing product value. Second, market diversification: China's textile trade with Belt and Road Initiative countries exceeded $80 billion in 2024, up 12% year-on-year, serving as a key hedge against US market risks.
Practical Recommendations
For Buyers - Reevaluate supply chain resilience: Adopt a 'China plus one' or multi-sourcing strategy to diversify dependency on a single country, while leveraging Chinese companies' technological advantages in high-count yarns and functional fabrics to maintain cooperation in high-end categories. - Monitor tariff exemptions and compliance pathways: Closely track the USTR's exemption lists and China's countermeasures, and use tools like customs classification rulings to mitigate compliance risks.
For Foreign Trade Enterprises - Accelerate product differentiation: Shift R&D investment toward high-value areas such as eco-friendly recycled fibers and smart textiles, using technological barriers to offset tariff disadvantages. For example, some Shengze companies have introduced bio-based polyester fabrics with gross margins exceeding 20%. - Expand into non-US markets: Focus on growth markets in Southeast Asia, the Middle East, and Africa; participate in local trade shows (e.g., Vietnam International Textile Exhibition); and establish localized warehousing and distribution networks. Leverage tariff preferences under the China-ASEAN FTA and RCEP to reduce export costs.
The CNTAC's statement is not just a political gesture but a call to action for the industry. Amid the resurgence of trade protectionism, China's textile sector must transform external pressure into internal driving force through innovation and global integration. For practitioners, short-term pain is inevitable, but long-term competitiveness depends on the choices made today.